"Everyone thinks they are advantaged by trading on news. They are not. This is why the average investor in mutual funds makes 3 percent per year while the average mutual fund earns 7 percent per year." Baron added.

"Investors who base their buy and sell decisions on current news generally sell and buy at exactly the wrong times. It's crazy," he continued.

"Companies have almost doubled their earnings in the past 13 years while stock prices have increased only about 25 percent," he said.

Expecting stock market returns for the next 20 years to approximate the 7 percent annual returns earned by U.S. stocks for generations, Baron quoted Albert Einstein that "the most powerful force in the universe is compound interest."

He said in his opinion based on the compounding effect, "the Dow Jones will be 30,000 in 10 years, 60,000 in 20 years."